BNY, the world's largest custody bank, plans to enable round-the-clock settlement of both conventional and tokenized U.S. Treasuries by 2027, following a successful after-hours transaction involving the reserves of two stablecoin issuers. The initiative targets a structural gap between 24/7 digital-asset markets and the weekday-bound settlement windows of the $29 trillion U.S. Treasury market, the world's largest and deepest government securities market.

According to a letter sent to clients and reported by Bloomberg, the bank will begin testing tokenized Treasuries on a private blockchain by the end of this year. Additionally, BNY intends to extend its existing settlement network later this year to cover more of the Asian, European, and U.S. trading days.

After-Hours Test Demonstrates Off-Hours Viability

The pilot transaction involved stablecoin reserves from Ripple's RLUSD and OpenEden's USDO. Ripple participated directly in the trade, while BNY's cash-management business unit, Dreyfus, acted on behalf of OpenEden. The trade was executed on Tradeweb after Fedwire Securities had already ceased processing secondary-market Treasury transfers for the day. Fedwire, the Federal Reserve's securities settlement system, typically halts secondary-market Treasury transfers in the early evening Eastern time on weekdays and remains inactive on weekends and holidays.

BNY confirmed that the transaction settled shortly afterward through existing cash rails. The securities themselves were not tokenized; rather, the test demonstrated that Treasury activity tied to stablecoin reserves could continue beyond the main U.S. settlement window.

Addressing the Weekend Lag

RLUSD and USDO both hold short-dated government debt as reserve assets. While the tokens themselves trade continuously, the underlying Treasuries remain bound to weekday settlement windows. This limitation can delay reserve adjustments following large token creations, redemptions, or collateral calls — a constraint BNY's initiative aims to resolve. The issue has grown more pressing as stablecoin issuers collectively have become among the largest holders of short-term U.S. government debt, rivaling the Treasury holdings of major sovereign funds and foreign central banks.

Existing Custody Relationships

BNY already serves as the primary custodian for RLUSD's reserves, a role established in 2025. The bank also provides custody and investment management services for OpenEden's tokenized Treasury fund.

In January, BNY introduced tokenized deposit balances, giving institutional clients an on-chain representation of commercial-bank money — a step the bank views as foundational to its broader tokenization strategy. The push places BNY alongside other major Wall Street institutions exploring blockchain-based settlement infrastructure, including JPMorgan's Onyx platform and Citi's tokenized-deposit experiments, as traditional finance seeks to bridge the operating-hours divide with digital-asset markets.